BREAKING: SNAAC to shut down this month

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Security National Automotive Acceptance Co. (SNAAC) will stop purchasing auto contracts and liquidate its portfolio after 30 years in the business, Auto Finance News has learned.

The lender will accept applications through Aug. 12 and purchase contracts through Aug. 19, the lender told AFN in an email. “The risk-adjusted returns in today’s market do not meet the thresholds SNAAC had set to ensure profitable and sustained growth which led us to this decision,” the email noted.

SNAAC will service loans through mid-September, and then the portfolio will be transitioned to a third-party as it liquidates.

The privately owned lender staffs 136 employees, according to Bloomberg. It’s led by Chief Executive Grant Skeens. The announcement comes on the heels of SNAAC’s initiatives for further growth in the auto lending sector. Earlier this year, the company told AFN that a goal for 2020 was to enhance predictive changes and mine data for its consumer behavior score.

See More: Prior to its shutdown, SNAAC on its customer-centric strategy

Moreover, in February 2018, the lender rolled out a new origination system to dealers in an effort to further hasten the funding process and provide more flexibility to deals. On top of that, SNAAC worked with Defi Solutions to develop the system throughout 2017 to allow for integrations with Dealertrack and RouteOne.

Yet, the initiatives have fallen short of keeping the company afloat. “While SNAAC’s portfolio continues to outperform the industry with declining delinquency and losses, due to diminished profitable growth opportunities within SNAAC’s key market segment, SNAAC’s board of directors has elected to wind down SNAAC’s operations and cease purchasing contracts,” the company noted in the email to AFN.

Meanwhile, SNAAC’s loan volume in two emblematic states — Texas and North Carolina — has been on the decline since January. SNAAC combined in those states to originate 149 loans in June, down from 195 in January, according to AutoCount data.

SNAAC has previously run afoul of the federal government. In 2017, the Mason, Ohio-based lender was hit with a consent order that cost the company $1.25 million in fines, over and above $1 million in refunds to more than 1,000 consumers. That followed a 2015 consent order that “found that SNAAC had indeed engaged in unfair, deceptive and abusive acts and practices” while collecting on outstanding auto loans.

Stay tuned for more details on this developing story…

 

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